Property investment Guide in Abu Dhabi

Why do so many people invest in real estate? Homes, lands, offices, shops, warehouses are always in need. It goes without saying, that demand goes up and down, but still, property segment features low volatility and optimally risk-adjusted returns, like no other. It proved to be one of the steadiest and safest economic sectors for investments.

Why invest in Abu Dhabi's property market? Abu Dhabi considers rather an expensive city that offers top quality if living, ranked high among leading cities of the world. It is the largest emirate by both size and gross domestic product contribution. Abu Dhabi's indexes of urban safety, talents competitiveness, global innovations implemented and environment for doing business leave behind the economics of major cities in GCC and MENA regions. As Dubai chosen for tourism mainly, so Abu Dhabi is more preferable for living and working.

The emirate affords a flexible and responsive business environment legally framed in the image and likeness of UK system and supported by most developed in the Middle East technology base. Multiple investment opportunities in Abu Dhabi range from Fin Tech to Ecotourism.

  • Diversified Investment Zones, that offer environment for logistics, industry, media, finance and sustainable energy allow 100% profit repatriation;
  • Property value is lower than in the major property markets globally;
  • Revenue-generating capacity of real estate sector in Abu Dhabi averaged on 6%-7% exceeds analogous values in most property markets of the world;
  • No property tax for foreign investors, no income tax, value added tax 5%;
  • Stable currency pegged at USD/AED: 3,67;
  • Units are delivered ready-to-move-in.

It should be admitted though, local business is opened and transparent to lesser extent than European markets are and therefore it is recommendable for first-time buyers especially, to secure the backing of a proven real estate agent and a lawyer.

Types of Ownership in Abu Dhabi

Historically, the most interesting real estate areas for foreign investors in Abu Dhabi include residential sector, hotel property and commercial premises. Worthy to note, that, this year a massive shift in investments to warehousing and logistics has been noticed. Major players reallotted their standard portfolio in favour of this industrial segment.

Property, including land, in Abu Dhabi may be acquired by UAE-nationals and legal entities, wholly owned by the Emiratis; UAE governmental establishments; companies, held by Abu Dhabi government; foreign natural persons and corporates. These categories of buyers share different rights and regulations concerning property purchase, as in terms of property location, mortgage loan size, etc.

Principal supervisory authority monitoring real estate market is Abu Dhabi Municipality, second-in-command establishment stands for Abu Dhabi Land Department. All kinds of real estate transactions must be registered by Land Department, otherwise a deal can't be recognized as legal and having come into full force.

There are three main types of property possession one may enter in the Emirates.

Freehold – is an ultimate and timeless right for property – units or sections in the building, including parcels of land, that entitles the owner to dispose, lease out, transfer as a gift or an inheritance. UAE-nationals and citizens of the GCC may obtain lands and properties in Abu Dhabi mainland without restrictions. As for other nations, they may register freehold ownership within purposefully designated areas only. Freehold investment areas in Abu Dhabi include yet popular Reem Island, Al Raha Beach, Al Reef, Saadiyat Island, Masdar City, Jubail Island, Al Shamkha and others.

Al Maryah Island, where Abu Dhabi Global Market (an international financial center) is located, refers to free investment zones also, though it is regulated separately and differently from all the rest free zones. The lands at Al Maryah Island are reserved for GCC and UAE-nationals usage, foreigners may share property right for apartment units or entire floors in the buildings. Besides, Abu Dhabi Global Market has its own regulatory division – Property Regulations and Strata Regulation, providing the list of real estate transactions mandatory for registration by this authority.

Leasehold – a time-framed limited ownership of properties excluding land, represented in the forms of "musataha", "usufruct" and long-term lease. Musataha agreement is submitted for 50 years, tenants are allowed to use and alter the property. The contract may be prolonged for the same duration.

Usufruct terms entitles the tenants use the units without right for their alteration. Usufruct is valid for a 99 year-period.

Long-term lease is available for an initial extent of time, not less than 25 years.

Jointly Owned Property – ownership of such a kind of property means that each occupier shares right for the parts of the building and/or land and areas of common use, i.e. lifts, lobbies, passages in the building and pools, pathways and likes onsite. All the unit-holders are requested to join Committee, which will monitor, regulate and sponsor the upkeep of commonly used utilities and facilities.

The law acknowledges one and more owners to the property. When an individual owner obtains and registers real estate under his/her name, that is sole proprietorship. Joint ownership is possible as well, in case when two or more natural persons participate in the purchase and that is reflected in the title deed.

Best areas for investment in Abu Dhabi described in this article.

Property Acquisition

Abu Dhabi real estate market is replete with offers for off-plan projects under construction as well as pre-owned premises. We advise to pay special attention to legal aspects of any deal. Not all specific information, related to property ownership available in public resources and buyer is responsible to find out if the property is clear and seller has the right to dispose it prior to any documents become signed.

Before buying currently uncomplete homes it is necessary to check whether the project is registered with Department of Economic Development and ensure if the purchase agreement contains an exact delivery date and monetary compensation in case the developer fails to finish the construction on time.

When acquiring a resale property, a customer should avoid paying any part of the purchase price without a sale agreement or any other form of contract.

New Law as of April, 2019 sets more clarity and legal security for off-plan sales to expatriates and foreign investors.

About off-plan with secondary property market spelled out.


According to new rules developers (off-plan sellers) should set escrow accounts, where payments, transferred by the buyer, are kept before agreed construction stages are delivered. Next important point, a developer is obliged to provide information pertaining to the right for property, including project certificate, approvals, obtained by Abu Dhabi Land Department and other related documents. Besides, when selling a property, a minor developer should submit No Objection certificate from the master-developer, or any other authority depending on the property, that confirms no debts unpaid. The same with land acquisition – absence of indebtedness should be recognized by Abu Dhabi Water and Electricity Authority.

Registration Fees

Charges for registration are paid when submitting the transfer act. At the meeting a seller, a buyer or their appointed representatives and a developer submit the documents, release the seller from contractual obligations and register the buyer as new proprietor.

Fees for the registration of sales and purchases are defined to be at least 1% and not more than 4% of the transaction value and divided equally between the parties, until it is agreed differently. Usufruct and Musataha registration fees are calculated at a rate of 4% of the contract value, multiplied by the number of the years stated. If the property is transferred as a gift, registration of new owner is charged at AED 3000 (for residential real estate). Will is registered for AED 3000 as well. Title deed issue costs AED 1000.

When mortgage loan is involved, that implies additional costs: 1 per 1000 of the value of the mortgage, capped at AED 1 mln per transaction; AED 200 for mortgage transfer, AED 1000 is paid to release and replace the mortgaged property with another one; AED 1000 for extension of repayment period and etc.

Real estate agency service in Abu Dhabi usually estimates at 2% of the property purchase price plus 5% VAT.

Charges for maintenance and service are paid a year in advance directly to the developer upon purchase. If purchasing a pre-owned property than service charge is calculated on a pro-rata basis, meaning per square foot.

Financing Real Estate

Buying a house with mortgage financing requires extensive planning for several years ahead. Expatriates, have been working for some years in the Emirates and intending to stay further on may be interested in home purchase, rather than rent it. Rental payments in Abu Dhabi are awesome to the budget and may reach near the half of salary, that is why building up equity is a smart decision. Having stable income non-residents may finance property acquisition via taking mortgage loan from UAE banks, as well as the residents, though on a bit different condition. An average interest rate reaches 4%, that is fairly low.


Criteria for mortgage issue are comparable to the requirements of European banks and entails a clear credit history, diligent financial habits and official place of work. Home loan is given for 25 years maximum. Minimal age of the applicants should be not less than 21 and not exceeding 65 for the moment of the final payment for expatriates and 70 years for the UAE-nationals. Terms and conditions vary from bank to bank but if taken on average, foreign borrowers may expect loan to be approved up to 75% of the purchase value for the 1st property purchase, residents – up to 80%. Maximal loan-to-ratio value for the 2nd and more property amounts to 60% and 50% for the property under construction. The minimum monthly salary/income required for a mortgage for an expat is about AED 10.000.

How to get a mortgage in Abu Dhabi read here.

Other rights for property


The concept of easements implies scenario upon which one party appropriates the property of a third party for a fee paid to the owner of the property, and the right of the easement is given in return. Easements contracts should be also registered at Land Department or Abu Dhabi Global Markets Land Register.

Rights That Can't Be Registered

Some rights for real estate property valid in other countries are not recognized by the laws in the Emirates. That refers to pre-emption rights, options and overage rights. Land Department and Abu Dhabi Global Markets Land Register may not ratify those rights, however, if the parties willing to, they should agree in writing upon those rights and include the agreement to the contract and that will not contradict to Abu Dhabi policy. In case, when it comes to the breach of the contract and trial disputes, the court will award damages only, any other specific performance is not available within confines of the Civil Code.


Contracts for residential lease are submitted by the tenants and landlords for the period starting from 1 year. Commercial leases last longer, up to 5 yeas upon the contract. Rental is calculated annually on a "per-square-foot" or a "per-square-meter" basis. The payments are delivered by the tenants by means of post-dated cheques. The practice is common and widely spread in the UAE.

The landlord may fix rental payment and increase it, as he/she considers necessary and there is no cap settled by the Law. Operating expenses, like utility bills, are normally paid by the tenants due to individual meter, installed in the unit, directly to the provider, until it is agreed differently. Use of additional amenities in master-communities counted in service charge that is paid off separately to the developer.

Landlords are responsible for property insurance payment, though it may be recovered in the service charge. Occupiers arrange payments for the contents' insurance. By the Law, maintenance, repair and renovation lie within the sphere of landlord's obligations, if not specified unlike wise in the lease contract.

Lease becomes automatically prolonged for the same period and same payment amount when neither of parties apply for contract termination. If the participants decide to stop the lease or go on different terms, then they should notify the other party in written 2 months prior to contract termination date. Early termination of the lease may involve penalties for the tenant.

Rental agreements made in Abu Dhabi Global Markets zone at Al Maryah Island are regulated in a different way, for example there's no automatic prolongation and no specified restrictions concerning subleases.


The Emirates are known for minimal number of taxes and low rates. Property related taxes cover sale-purchase transaction fee 2% of the price and registration of the mortgage equivalent to 0,1% of the loan amount.

Landlords are liable to pay charges for lease agreement registration, amendments to the contract and building registration. All the leases fixed for shorter term than four years are mandatory to be registered in "Tawtheeq" system. Contracts embracing period more than four years are all subject to listing in another base, called "Tamleeq". Both systems require separate charges.

Dispute Resolution

The methods of legal conflict settlement should be mentioned in each contract, concerning real estate transactions. Parties may refer to arbitration tribunal or Abu Dhabi courts. Abu Dhabi has a three-tire court system: court of the first instance, appeals court and the court of cassation. Most of the cases filed at the Abu Dhabi Courts are referred to the reconciliation department, in case the court deems that matter could be settled amicably. However, by now, the most of the sale-purchase agreements, executed in Abu Dhabi relate to the matter of arbitration to the Abu Dhabi Commercial Conciliation and Arbitration Center because of procedural ease and the participants can choose the arbitrators.